Saudi Arabian retail chain BinDawood's Q3 profit down by 37% as pandemic hits sales
Company's revenue was hit due to limited Hajj visitors amid Covid-19 and a temporary closure of its shops in Makkah and Madinah
BinDawood Holding Company, Saudi Arabia’s third-biggest grocery chain, reported a 37 per cent drop in its third quarter net profit as the pandemic proved challenging to overall sales.
Net profit for the three months to the end of September fell to 78.6 million Saudi riyals ($20.9m) compared to 124.4m in the same period last year, the company said in a statement on Tuesday to the kingdom's Tadawul exchange, where its shares trade.
Revenue dipped 9.5 per cent to 1.08 billion riyals during the period due to limited Hajj visitors this year in the light of Covid-19 pandemic and the company's decision to temporarily close its shops in Makkah and Madinah. Most of the branches have subsequently reopened, the company said earlier this week.
"By all accounts, this was a challenging quarter despite positive sales growth across our Danube stores," said Ahmad BinDawood, chief executive of BinDawood Holding.
"Our business is not immune to the impact of the pandemic and the VAT increase, which happened in July 2020, but operating two retail brands, BinDawood and Danube, gives us a unique advantage due to our considerably diverse range of customers and products."
BinDawood reported a 32 per cent increase in net profit during the first nine months of the year to 390.3m riyals, compared to 295.3m riyals during the same period last year.
"Improvements were supported and driven by effective cost management of the business," the company said.
Revenue during this period increased by 11.6 per cent to 4 billion riyals, compared to 3.6bn riyals for the same period last year.
BinDawood Holding began trading on Tadawul last month after listing 20 per cent of its shares. Investcorp, which acquired a minority stake in the hypermarket operator in 2016, exited through the listing.
The company has 73 stores, of which 51 are hypermarkets and 22 are supermarkets. It operates mid-market supermarket chain BinDawood and high-end grocery brand Danube.
Danube's revenue rose 23.5 per cent during the first nine months this year to 540.2m riyals, helped by growing demand for premium food and four new store openings. This offset a decline in sales at the company's BinDawood stores, which fell 9.1 per cent to 120.4m riyals.
Updated: November 10, 2020 02:57 PM